Embracing ObamaCare caused Colorado budget crunch

The newest dubious justification for weakening Colorado’s limits on government spending is “our aging population.”

The spending lobby seeks to frighten senior citizens by telling them that the Taxpayers Bill of Rights (TABOR) in our state constitution “hampers the ability to fund key programs.”

Parents are told that public schools are in a squeeze because state government needs more money. But ask why social welfare spending is growing three times as fast as spending on education, and you’re told it’s because Medicaid has enrolled more children and senior citizens – as if that happened merely by chance.

Those explanations ignore some inconvenient facts.

• Colorado spends proportionately more on Medicaid than do most states. According to the National Association of State Budget Officers, states spend an average of 15.6 percent of state funds on Medicaid. In Colorado, the department that administers Medicaid consumes 26.7 percent of the state general fund.

• Colorado’s growth in Medicaid is predominately driven by changes to state law that expanded eligibility to fully implement ObamaCare – not by an aging population.

Here, it’s important to distinguish between Medicaid (a welfare program funded by state and federal governments) and Medicare (a federal government insurance program for the elderly and disabled.

ObamaCare made deep cuts to Medicare and shifted funding to Medicaid. States were then pressured to allow able-bodied adults (ages 19-64) with incomes above the federal poverty level to enroll in Medicaid.

ObamaCare transformed Medicaid from a program that served the most vulnerable and needy to a broad welfare program for working-age adults with no children and no disabilities.

• Colorado lawmakers created at least four entirely new Medicaid categories which now pay for government health care for 454,000 people, including nearly 300,000 adults who do not have children and are not disabled. In addition, the state expanded income eligibility from 100% of federal poverty level to 138% across the board and as much as 250% in others. Enrollment in these categories more than doubled from 358,000 pre-ObamaCare to an estimated 721,000 in 2016-17.

As a result, general fund spending on Medicaid grew from $1.15 billion in 2009-10 to $2.67 billion in 2016-17. Add to that nearly $1.5 billion from the “hospital provider fee” and matching federal funds. Total spending on the department that oversees Medicaid has grown to more than $9 billion – fully one-third of all money spent by the State of Colorado.

As a result, nearly 1.4 million Coloradans – one of every four – are now enrolled in Medicaid. That’s a significant cost increase compared to 2007-08 when Medicaid enrollment represented just one of every 12 residents.

By comparison, Colorado’s elderly population is growing modestly from 11 percent of total state population in 2007 to 13 percent in 2015 and projected to reach 18 percent by 2030. Those levels are similar to or slightly lower than national averages.

The spending lobby likes to pretend that these changes are the result of demographics. They are not. Rather, they are a calculated choice by lawmakers to expand social welfare programs.

Nineteen states – including our neighbors in Kansas, Nebraska, Oklahoma, Utah and Wyoming, as well as “purple” states like Florida, Virginia and North Carolina – have refused to expand Medicaid to embrace ObamaCare.

In 2014, states that expanded Medicaid experienced enrollment growth of 23 percent; states that did not expand realized an increase of less than 3 percent.

So, an objective analysis of Colorado’s budget must acknowledge that the reason schools and roads are constantly feeling the squeeze is because lawmakers unleashed a budget-busting monster when they voted to embrace ObamaCare and expand Medicaid.

The solution is not to further soak taxpayers but for lawmakers to craft a responsible budget that reflects both the parameters and priorities set by Coloradans – not the wish lists of the spending lobby and Washington politicians.